Evan Schwarten

Miners have slashed their capital investment plans for the current financial year by more than eight per cent, compared to three months ago, figures released by the Australian Bureau of Statistics (ABS) show.

AMP chief economist Dr Shane Oliver said the figures suggested the boom in mining investment, expected to peak in 2013, may already be at, or close to its highest point.

"It does look as if mining investment is peaking," he said.

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"The loss of momentum is quite steep."

A number of large scale mining projects have been cancelled or postponed in recent months in response to a drop in commodity prices and cost blowouts.

Capital expenditure, which covers spending on buildings and structures as well as equipment and machinery, has been a major driver of the Australian economy in recent years, mostly due to investment in the mining industry.

But the ABS quarterly survey showed the private sector had cut its spending plans for 2012/13 by $5.9 billion or 3.3 per cent compared to three months ago, the biggest such revision in the survey's history, with capital spending plans in the mining sector being scaled down by $9.6 billion or 8.1 per cent.

Total capital expenditure is now expected to grow by around 11 per cent this financial year, not adjusting for price changes, down from a previous projection of 21 per cent growth for 2012/13 and actual growth of 30 per cent in 2011/12.

The Reserve Bank of Australia is hoping sectors such as housing, manufacturing and retail will be able to pick up and keep the national economy growing at a relatively strong rate in 2013, even as mining investment slows.

But National Australia Bank (NAB) senior economist David De Garis said the latest figures also showed a cut in spending intentions for the non-mining sectors of the economy.

"The non-resources industries are expected to pick up the slack but if anything the evidence is they are going backwards, not picking up the slack," he said.

He said NAB was now forecasting economic growth for Australia of 2.5 per cent in 2013, down from 3.7 per cent in the year to June 2012.

"It's a more sobering outlook," he said.

Both Dr Oliver and Mr De Garis said the downgrade to capital expenditure plans meant the RBA was more likely to cut the cash rate at its monthly board meeting on December 4.

"To be confident that we are going to see a decent pick up in the non-mining sectors in 2013 we really do need a rate cut next week," he said.

The RBA kept the cash rate on hold at 3.25 per cent at its November board meeting.